Successful E-Auctions
  David Turner


  Spend Solutions Ltd
  www.spendsolutions.co.uk
What is an e-auction?

• Internet - based activity which we use to negotiate prices for purchasing or sale of
  direct materials, capital or services
• This can be either:
        - private (few bidders)
        - open (little or no restriction)
• A tool which replaces conventional methods of paper tendering or face to face
  negotiations
How does it work
 • Suppliers log onto the website via a password protected access
   screens
 • Can place multiple bids for the same product during an event
 • Identities of bidders are usually hidden from other suppliers,
   although the position or ranking of other suppliers may be visible
   during the event
 • Independent of other e-procurement activity
Tips for a successful event
 Preparation is key
  • right products
  • the right suppliers (pre-qualified)
  • provide clear documentation of what is required
  • ensure a contingency in place in case of technology fails
Tips for a successful event


  Keep auctions simple

     keep the number of items low
     keep the suppliers informed
     ensure correct timing and time zones?
     check time of day / day of the week?
Tips for a successful event


 Suppliers must understand process
  explain it
  train the suppliers
  ask for feedback after the event
  (what did the suppliers think of participating in an e-auction?)
Ethics


  Suppliers may be initially suspicious - do not misuse the technology

  Train and prepare suppliers - run a mock auction in advance of the live event to
   build confidence

  Follow up with suppliers that were unsuccessful to get their feedback
The event

 Supplier bid strategy - waiting until last few minutes to bid or their opening bid is
  extremely aggressive to frighten competition

 Duration - typically 1 to 2 hours but can be as short as 15 minutes or as long as 24
  hours

 Allow bid extensions usually of 2-5 minute duration

 Proxy bids – consider contingency if internet connection fails
Ensure

•   You   provide clear documentation of requirements
•   You   provide the supplier with clear instruction on how to use the tool
•   You   provide constructive feedback to unsuccessful suppliers
•   You   put in place the appropriate contract
Selecting the right eAuction tool – some
considerations
• Software As A Service – or behind your firewall ?
• Multi language – Russian and those countries where you are bidding
   ▫ Bidders can select their preferred language
• Multi currency
   ▫ How does the tool handle currency fluctuations
• Transformational bidding – for example weighting price by other non price based
  factors - Quality, Delivery or other KPI’s
• Some specialised eAuction tools – shipping or utilities

Successful E Auctions

  • 1.
    Successful E-Auctions David Turner Spend Solutions Ltd www.spendsolutions.co.uk
  • 2.
    What is ane-auction? • Internet - based activity which we use to negotiate prices for purchasing or sale of direct materials, capital or services • This can be either: - private (few bidders) - open (little or no restriction) • A tool which replaces conventional methods of paper tendering or face to face negotiations
  • 3.
    How does itwork • Suppliers log onto the website via a password protected access screens • Can place multiple bids for the same product during an event • Identities of bidders are usually hidden from other suppliers, although the position or ranking of other suppliers may be visible during the event • Independent of other e-procurement activity
  • 4.
    Tips for asuccessful event Preparation is key • right products • the right suppliers (pre-qualified) • provide clear documentation of what is required • ensure a contingency in place in case of technology fails
  • 5.
    Tips for asuccessful event Keep auctions simple  keep the number of items low  keep the suppliers informed  ensure correct timing and time zones?  check time of day / day of the week?
  • 6.
    Tips for asuccessful event Suppliers must understand process  explain it  train the suppliers  ask for feedback after the event  (what did the suppliers think of participating in an e-auction?)
  • 7.
    Ethics  Suppliersmay be initially suspicious - do not misuse the technology  Train and prepare suppliers - run a mock auction in advance of the live event to build confidence  Follow up with suppliers that were unsuccessful to get their feedback
  • 8.
    The event  Supplierbid strategy - waiting until last few minutes to bid or their opening bid is extremely aggressive to frighten competition  Duration - typically 1 to 2 hours but can be as short as 15 minutes or as long as 24 hours  Allow bid extensions usually of 2-5 minute duration  Proxy bids – consider contingency if internet connection fails
  • 9.
    Ensure • You provide clear documentation of requirements • You provide the supplier with clear instruction on how to use the tool • You provide constructive feedback to unsuccessful suppliers • You put in place the appropriate contract
  • 10.
    Selecting the righteAuction tool – some considerations • Software As A Service – or behind your firewall ? • Multi language – Russian and those countries where you are bidding ▫ Bidders can select their preferred language • Multi currency ▫ How does the tool handle currency fluctuations • Transformational bidding – for example weighting price by other non price based factors - Quality, Delivery or other KPI’s • Some specialised eAuction tools – shipping or utilities